The government is reportedly concerned that businesses may have pocketed part of the Rs 1 trillion worth of GST rate cuts that was to be passed on to the consumer.

Money GST Thursday, January 16, 2020 - 12:46

The National Anti-Profiteering Authority (NAA), is likely to come down heavily on several organisations in the corporate sector, as show cause notices could be issued to 40-odd companies, asking them why action should not be initiated against them for flouting GST norms. 

There has been a spate of complaints from consumer bodies that despite the GST council lowering GST rates for several products and services, companies have failed to pass on the benefits to their customers by lowering the MRP. Instead, these companies have pocketed the difference, thereby denying the end consumer the benefit. As per reports, the government is concerned that businesses may have pocketed part of the Rs 1 trillion worth of GST rate cuts that was to benefit end users and thus help stimulate demand in the economy.

The NAA could also force these companies to cough up the amounts they may have unduly pocketed and the funds so collected will be set aside for using for GST-related purposes.

The body has been largely successful in conducting investigations on complaints received. According to reports, 60% of cases resulted in the concerned companies admitting that they had erred and some of them depositing around Rs 600 crore in a separate fund to be used for consumer benefits.

This time, sources told Mint that 40 companies across sectors like real estate, electronics, television makers, ayurvedic products, etc. could receive notices. There are also leading multiplex chains and home products firms in the list of 40 firms, it is reported.

The government is also simultaneously planning to create awareness among consumers on their rights, how tax rates have been lowered by the government and that companies should pass on the benefits to the consumer.